TRANSPACIFIC FREIGHT RATES SOAR AS CARRIERS PUSH GRI AMID U.S. TRADE POLICY UNCERTAINTY.

Transpacific freight rates have surged sharply as carriers collectively raise prices amid unstable U.S. trade policies. The Asia-Europe market has also seen increases, though its sustainability remains uncertain.

 

 

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Spot container freight rates on the Transpacific route continued to record double-digit growth for the week, as carriers pushed prices higher amid a lull in the ongoing US-China trade war. On the Asia-Europe route, increases were more modest; however, freight forwarders remain skeptical about the sustainability of this upward trend as the market searches for signs of the upcoming peak season.

 

A recent ruling by the US International Trade Court declaring many of President Trump's retaliatory tariffs invalid came too late in the week to significantly impact freight rate indices. Therefore, the previously announced 90-day tariff suspension likely played a key role in maintaining rate stability this week. However, significant uncertainty surrounding US trade policy has undoubtedly affected Transpacific rates: Drewry’s World Container Index (WCI) shows that rates on the Shanghai–Los Angeles leg rose 17% week-on-week, reaching $3,788 per 40ft container, while Shanghai–New York increased 14% to $5,172 per 40ft container.

 

While the WCI records spot rates paid over the past seven days, the Shanghai Containerized Freight Index (SCFI) reflects rates quoted during the week and often — though not always — correlates with the WCI for the following week. If this pattern holds true for the coming week, shippers on the Transpacific route may face continued double-digit increases: last week’s SCFI showed a 58% weekly rise for Shanghai to major US West Coast ports, ending at $5,172 per 40ft container—approximately $1,400 higher than this week’s WCI figure for the same route.

 

Additionally, SCFI rates for Shanghai to major US East Coast ports jumped 46% week-on-week to $6,243 per 40ft container, around $1,000 above the WCI figure for that route. The sharp surge in spot Transpacific rates in early June is unsurprising, as carriers announced General Rate Increases (GRI) ranging from $1,000 to $3,000 per 40ft container, effective June 1 (Sunday). Meanwhile, buyers of spot freight from Asia to Northern Europe also faced higher rates this week, marking the first price rise since early April. The WCI Shanghai–Rotterdam leg increased 6% week-on-week to $2,159 per 40ft container, and Shanghai–Genoa rose 3% to $2,939 per 40ft container.

 

If the SCFI data proves accurate, the market could see even higher rates next week, with Shanghai to Northern Europe climbing 20% week-on-week to $3,174 per 40ft container, and Shanghai to the Mediterranean up 31% to $6,122 per 40ft container. SCFI’s figures may reflect new FAK (Freight All Kinds) rates announced by carriers for June 1, targeting $3,100–$3,300 for shipments to Northern Europe and $4,400–$5,000 for Mediterranean-bound cargo. However, freight forwarders on this route predict the rate hike will not be sustained.

 

One forwarder told The Loadstar: “We’ve seen rates increase from May into June; however, for Asia to Northern Europe, these prices have started to ease, and I expect further decreases.”

 

“A portion of the increase will remain, above May’s level, but not at current levels nor at what carriers hope for. It seems carriers are trying to apply similar rate hikes as on Transpacific routes to stem further declines,” the forwarder added, noting demand remains steady and vessel space availability is normal.

 

“Demand has not shown significant growth, and booking from Asia to Europe has been smooth so far.”

 

However, another forwarder on this route noted that “carriers are telling us major shippers (BCOs) are peaking now, plus cancellations and full ships — so clearly, there is a peak season factor at play.”

 

Zim Line announced a peak season surcharge (PSS) of $1,400 per 40ft container for Asia-Europe shipments starting June 6, while CMA CGM plans a $1,000 PSS for Asia-Mediterranean routes effective June 7.

 

Source: gCaptain

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